Pounded by ambiguity surrounding the global economic outlook in various parts of the world, investors in gold are searching for clues to set the future direction for the price of the precious metal. With gold gyrating around 1600 dollars per oz, the metal has gained five percent since the start of the current year. However, the metal is trading 15 percent below the peak level it touched during last year. The local markets have followed suit, with the yellow metal trading around Rs 49,028 per 10 grams on Friday, marking a jump of eight percent since the start of the year. Against the backdrop of depreciation of the rupee against the US dollar, the quantum of change in gold prices was greater in the domestic market than the global markets. The actions of central banks on either side of the Atlantic seem to be the primary triggers to recent movements in the price of gold. Although, the economic and fiscal situation in both the US and the EU remain in remission, US economic data and statements by economists and policymakers are bouncing gold prices back and forth. However, with gold trading much below its resistance level amid mounting concerns regarding fiscal cliff in US and no end in sight for EU issues, the market expects positive outlook on gold for the second half of the year. HSBC expects gold to reach 1900 dollars per oz by the end of the year, nearly 19 percent higher from the current level. The bank believes that gold will rally as the US fiscal cliff approaches. "Economic uncertainty, geopolitical tensions and the uncertainty of the US November elections are theoretically gold-bullish," according to the report. UBS AG, a Swiss bank, has also raised its short-term outlook on gold as it expects the yellow metal to average around 1700 dollars per oz in the current month. Moreover, there is good news for hoarders with seasonal buying season around the corner as gold prices usually tends to edge higher just before the start of wedding and festive season in India.
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